The Market Ticker
Commentary on The Capital Markets- Category [Federal Reserve]

Read between the lines...

Mired in a world of low growth, low inflation and low interest rates, officials from the Federal Reserve, Bank of Japan and the European Central Bank said their efforts to bolster the economy through monetary policy may falter unless elected leaders stepped forward with bold measures. These would range from immigration reform in Japan to structural changes to boost productivity and growth in the U.S. and Europe.

And what are we talking about here?  Something like this:

In a lunch address by Princeton University economist Christopher Sims, policymakers were told that it may take a massive program, large enough even to shock taxpayers into a different, inflationary view of the future.

Understand this folks:

Inflation is exactly identical to a tax in terms of its impact on your wallet, except that it is a tax on everything, not just production.

Taxes can be avoided -- legally -- by refusing to produce.  Inflation takes that which you already earned.

It is thus much like a "property tax" in form and substance in that it is both pernicious and permanent.

"Shock taxpayers"?  Yes, such a program might well do that.

It might "shock" them enough that they start earmarking lampposts and boiling rope, and Christopher Sims might want to consider that possibility before promoting such a thing, especially considering that the part of society that bears the lion's share of such a policy are the lower economic strata as they have no surplus to invest in something that can attempt to offset the damage.

The rather-interesting congruence among the central bank wonks ought to get your attention, as it is an admission that (1) quantitative easing didn't work, (2) negative interest rates haven't worked, (3) ZIRP ("ultra low") rates haven't worked and that all of these folks have realized that they're out of policy options that can and will "stimulate" debt demand -- and thus allow yet another turn of the crank of the exponential growth of same.

Here it comes folks, and it's going to get quite messy.

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